Veeco Provides Update on Patent Litigation

On April 12, 2017, Veeco filed a patent infringement complaint in the U.S. District Court for the Eastern District of New York ("EDNY") against SGL Carbon, LLC and SGL Carbon SE (collectively, "SGL"), alleging infringement of patents relating to wafer carrier technology used in metal organic chemical vapor deposition ("MOCVD") equipment. The complaint alleges that SGL infringes Veeco's patents by making and selling certain wafer carriers to Veeco's competitor, Advanced Micro-Fabrication Equipment, Inc. ("AMEC").

On November 2, 2017, the EDNY granted Veeco's motion for a preliminary injunction prohibiting SGL from shipping wafer carriers using Veeco's patented technology without Veeco's express authorization. On November 16, 2017, the EDNY denied SGL's motion to suspend the preliminary injunction prohibiting SGL's sale of wafer carriers for use in MOCVD systems made by AMEC. SGL had filed a motion requesting that the court suspend, or "stay," the preliminary injunction pending an appeal by SGL to the U.S. Court of Appeals for the Federal Circuit ("CAFC").

The court's order means that the preliminary injunction, which prohibits SGL from shipping wafer carriers using Veeco's patented technology, will remain in place during the appeal by SGL. The appeal process at the CAFC usually takes over a year to complete. In its appeal, SGL will bear the burden of convincing the CAFC that the preliminary injunction should be overturned. Appeals of preliminary injunctions are evaluated by the CAFC under the highly deferential "abuse of discretion" standard of review. As a result, Veeco believes that it is highly unlikely that the CAFC will overturn the preliminary injunction, especially in light of statistics showing that a substantial majority of preliminary injunctions are affirmed by the CAFC on appeal. Moreover, Veeco cross-appealed, seeking to broaden the scope of the preliminary injunction.

In the meantime, Veeco's patent infringement action in the EDNY is proceeding toward trial. In this action, Veeco is seeking a post-trial permanent injunction, monetary damages and other relief.

AMEC vs Veeco

On July 13, 2017, AMEC filed a patent infringement complaint against Veeco Instruments Shanghai Co., Ltd. ("Veeco Shanghai") with the Fujian High Court in China, alleging that Veeco's MOCVD systems infringed a Chinese utility model patent relating to the synchronous movement engagement mechanism in a chemical vapor deposition reactor and seeking injunctive relief and monetary damages. Veeco Shanghai filed a petition for invalidation of this patent with the Chinese Patent Reexamination Board ("PRB"). The Fujian High Court suspended the infringement case against Veeco Shanghai pending the outcome of the invalidation proceeding at the PRB. On November 24, 2017, the PRB issued a ruling in the invalidation proceeding which upheld AMEC's patent. During the proceeding, AMEC surrendered its broadest independent claim, thereby significantly narrowing the scope of this patent.

On December 7, 2017, without providing notice to Veeco and without hearing Veeco's position on alleged infringement, the Fujian High Court issued a ruling, applicable in China, that requires Veeco Shanghai to stop importing, making, selling and offering to sell Veeco EPIK 700 model MOCVD systems which contain the accused infringing synchronous movement engagement mechanism covered by AMEC utility model patent ZL 201220056049.5 and wafer carriers used as supplies for the EPIK 700 MOCVD system.

Although Veeco is still evaluating the ruling, Veeco notes that:

The ruling applies only in China.

The ruling does not apply to EPIK 700 MOCVD systems previously shipped to customers in China.

Veeco will continue to service and support its installed base of EPIK 700 MOCVD systems (while complying with the ruling).

By its specific terms, the ruling does not cover Veeco's EPIK 868 MOCVD system.

Veeco is working on potential alternative designs which are not covered by the ruling or the utility model patent asserted by AMEC.

"Veeco continues to believe this lawsuit is without merit," said John R. Peeler, Chairman and CEO of Veeco. "We plan to appeal this ruling, to vigorously defend against this matter and to enforce Veeco's IP rights. Veeco remains committed to its customers in China and to supporting its installed base of MOCVD systems."

About VeecoVeeco (NASDAQ: VECO) is a leading manufacturer of innovative semiconductor process equipment. Our proven MOCVD, lithography, laser annealing, ion beam and single wafer etch & clean technologies play an integral role in producing LEDs for solid-state lighting and displays, and in the fabrication of advanced semiconductor devices. With equipment designed to maximize performance, yield and cost of ownership, Veeco holds technology leadership positions in all these served markets. To learn more about Veeco's innovative equipment and services, visit www.veeco.com.

Forward-looking StatementsTo the extent that this news release discusses expectations or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the risks discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K for the year ended December 31, 2016 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.